{"id":52733,"date":"2025-02-24T16:28:00","date_gmt":"2025-02-24T10:58:00","guid":{"rendered":"https:\/\/www.equentis.com\/blog\/?p=52733"},"modified":"2025-02-24T16:29:51","modified_gmt":"2025-02-24T10:59:51","slug":"bain-capital-to-buy-46-of-manappuram-finance-in-a-1-bn-deal-reshaping-indias-gold-loan-market","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/bain-capital-to-buy-46-of-manappuram-finance-in-a-1-bn-deal-reshaping-indias-gold-loan-market\/","title":{"rendered":"Bain Capital to Buy 46% of Manappuram Finance in a $1 Bn Deal, Reshaping India\u2019s Gold Loan Market"},"content":{"rendered":"
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In a significant move within the financial sector, American private equity firm Bain Capital is on the verge of acquiring a controlling stake in Kerala-based non-banking financial company (NBFC) Manappuram Finance. This potential $1 billion deal is poised to reshape the landscape of India’s gold loan market. <\/p>\n\n\n\n

The preferential allotment of shares is expected to be priced at a 12.5-15% premium to the current market price. Meanwhile, the secondary share sale will be executed at a higher premium, estimated at 22.5-25% over Friday\u2019s closing price. The blended price for the transaction is projected to be in the range of \u20b9237-240 per share. Economic Times<\/a><\/p>\n\n\n\n

Market Response<\/strong><\/h2>\n\n\n\n

The news of the deal has positively impacted Manappuram Finance’s stock performance. Shares surged by nearly 2% on the NSE<\/a> and 4% on the BSE<\/a> on February 24, 2025, reaching a high of \u20b9209.\u00a0\u00a0Source: BSE<\/a>\/NSE<\/a><\/p>\n\n\n\n

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Source: NSE<\/a>
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Current Shareholding and MCap<\/strong><\/h2>\n\n\n\n

Discussions between Bain Capital and Manappuram Finance commenced in November 2024, focusing on Bain acquiring a substantial portion of the promoter’s stake. The promoter group, led by Managing Director and CEO V.P. Nandakumar, currently holds 35.25% of the company’s shares. With Manappuram’s market capitalization recorded at approximately \u20b917,000 crore (based on a share price of \u20b9200.85 as of February 21, 2025), this transaction represents a significant investment.<\/p>\n\n\n\n

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Manappuram Finance Ltd Financial Highlights<\/strong><\/h2>\n\n\n\n
Market Cap as of 24th Feb 2025<\/strong><\/td>Promoter Group Share<\/strong><\/td>Public Share<\/strong><\/td>CMP<\/strong><\/td>ROCE<\/a> %<\/strong><\/td>ROE%<\/strong><\/td><\/tr>
\u20b917,393 Crore<\/td>35.2%<\/td>64.8<\/td>\u20b9205<\/td>13.8<\/td>20.6<\/td><\/tr><\/tbody><\/table>
Source: Economic Times<\/a>\/Screener<\/a><\/figcaption><\/figure>\n\n\n\n

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Manappuram\u2019s AUM Growth and Business Shift<\/strong><\/h2>\n\n\n\n

Manappuram Finance\u2019s consolidated assets under management (AUM) rose by 9.5% year-on-year, reaching \u20b944,217 crore by the end of December. However, on a sequential basis, AUM declined by 3.3%, primarily due to regulatory restrictions on expanding its subsidiary, Asirvad Micro Finance.<\/p>\n\n\n\n

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Gold Loan Segment Drives Growth<\/strong><\/strong><\/h2>\n\n\n\n

The company\u2019s core gold loan business continued to expand, registering an 18.8% year-on-year growth to \u20b924,504 crore. This segment now accounts for 55.4% of Manappuram\u2019s total AUM, reaffirming its stronghold in the gold loan market.<\/p>\n\n\n\n

Asset Under Management (Q3FY25)<\/strong><\/td><\/tr>
Gold Loans<\/td>MFI<\/td>VEF<\/td>MSME<\/td>Onlending<\/td><\/tr>
55%<\/td>21%<\/td>12%<\/td>7%<\/td>4%<\/td><\/tr><\/tbody><\/table>
Economic Times<\/a><\/figcaption><\/figure>\n\n\n\n

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Challenges in the Microfinance Sector<\/strong><\/h2>\n\n\n\n

Asirvad Microfinance, like many of its peers in the microfinance sector, remains under financial stress. Manappuram\u2019s management has indicated a strategic shift towards secured lending to mitigate risks and ensure stability in the company\u2019s financial portfolio.<\/p>\n\n\n\n

Know More:  <\/strong>SEBI <\/b><\/a>Registered investment advisory |  Stock investment advisory<\/a><\/strong><\/pre>\n\n\n\n
Key Details of Bain Capital-Manappuram Deal <\/strong><\/h2>\n\n\n\n